Ski Roundtop, Inc. v. Commonwealth

NIX, Chief Justice,

concurring.

Any inquiry as to the applicability of an exemption must begin with the underlying recognition that all tax exemp *235 tions must be traceable to a statutory origin. See Appeal of Young Men’s Christian Association of Pittsburgh, 383 Pa. 176 , 117 A.2d 743 (1955) (affirming on the opinion of the court below reported at 4 Pa. D & C.2d 186). The statutory origin in this instance is found in the Capital Stock Tax Act of March 4, 1971, P.L. § No. 2, art. VI, § 602, 72 P.S. § 7602. Since only the legislature, acting within the limitations of the Constitution, is empowered to determine what property shall be subject to taxation and what shall be immune, Southwest Delaware County Municipal Authority v. Aston Tp., 413 Pa. 526 , 198 A.2d 867 (1964), courts are constrained to strictly adhere to the legislative scheme.

Unfortunately the legislature, in creating what has come to be known as the “manufacturing exemption”, failed to offer its definition of the term “manufacturing” as used in this context. To fill the void, this Court in 1961 attempted to supply a workable definition for this purpose. Philadelphia School District v. Parent Metal Products, Inc., 402 Pa. 361 , 167 A.2d 257 (1961). Since the legislature has not seen fit to further clarify its intended meaning of the term since our definition offered in Parent Metal Products, Inc., it may properly be assumed that the definition given therein comports with legislative intention. See e.g., In re Obradovich’s Appeal, 386 Pa. 342 , 126 A.2d 435, 437 (1956) (“[I]t is the function of a court to construe legislation as it exists and for the legislature to enact whatever changes therein it may deem desirable____”). The essence of that definition is “the application of labor or skill to material whereby the original article is changed into a new, different and useful article.” Parent Metal Products, Inc., 402 Pa. at 364 , 167 A.2d at 258 (Emphasis added). It was further stated that “[wjhether or not an article is a manufactured product depends upon whether or not it has gone through a substantial transformation in form, qualities and adaptability in use from the original material,____” Id., 402 Pa. at 364 , 167 A.2d at 258-259.

The transformation of water to snow through the process applied in this appeal is clearly a “different” and “useful” *236 article under the Parent Metal Products, Inc. test. The more difficult question is whether it is a “new” substance within the criteria established. Clearly the housewife who fills the ice trays and places them in the refrigerator to have ice available in the morning is not engaged in manufacturing ice. While the resulting ice is the water in a “different” form, it has not undergone a substantial transformation as would justify concluding that a “new” product had been created. It is true, as Mr. Justice McDermott argues, that snow is but an altered form of water. The distinction is as Mr. Justice Flaherty suggests, that the sophistication involved in the process of altering the form provides the key. I also agree that the element of permanency supplied by our Court in Commonwealth v. American Ice Co., 406 Pa. 322 , 178 A.2d 768 (1962), was an unfortunate gratuity not warranted by the statutory language.

Finally, I am constrained to note that the opinion of Mr. Justice Flaherty speaking for the Court does not reflect an adoption of the “flexible approach” urged by Mr. Justice Larsen since his dissenting opinion in Golden Triangle Broadcasting, Inc., v. City of Pittsburgh, 483 Pa. 525, 535 , 397 A.2d 1147, 1152 (1979) (Larsen dissenting, joined by Mr. Justice Manderino). This view in essence urges that we adopt as a rule of thumb the principle that “any doubts concerning the status of appellants’ activity must be resolved in favor of appellants.” As previously discussed herein, it is our responsibility to strictly carry out statutory mandate. Having determined the meaning of the term “manufacturing” which has been accepted by the legislature, as evidenced by their inaction since 1961 to offer any attempt to change or modify it, we are bound to apply it in each case without modification. The suggestion that the well established meaning of manufacturing should be adjusted on a case-to-case basis to satisfy a perceived legislative intent to foster manufacturing is, in my opinion, jurisprudentially unsound. If the established definition does not conform to legislative intent, it is the responsibility of the legislature to make that adjustment.

*237 For the reasons expressed herein, I join the opinion of the Court authored by Mr. Justice Flaherty.

PAPADAKOS, J., joins in this concurring opinion.